SINGAPORE – Singapore-based e-commerce platform Qoo10 was ordered into liquidation by the Singapore High Court on Monday (11 November). The decision also includes the appointment of a liquidator to handle the company.
Qoo10 has long been embroiled in a debt scandal with its vendors and business partners. Many have complained of delayed payments, with some even filing lawsuits for justice.
One of the affected parties is Korea Culture Promotion (KCP), a company that manages cultural portals and provides gift certificates and cultural products to its customers in South Korea. According to court documents obtained by CNA, KCP claims that Qoo10 owes them nearly 6 billion won (approximately US$4.3 million). In addition, KCP also claimed that Qoo10 refused to fulfil guarantees for the obligations of its two South Korean subsidiaries, TMON and WeMakePrice, which totalled more than 70 billion won.
Qoo10’s financial problems came to light last July, when TMON and WeMakePrice failed to make payments to merchants on their platform. This triggered an investigation by South Korean financial authorities. In October, the Seoul Bankruptcy Court ruled that the two platforms be sold to resolve the late payment issue.
In Singapore, the High Court also allowed another creditor, 21st Century Healthcare, to replace KCP as a claimant. According to court documents, 21st Century Healthcare claims Qoo10 owes them about S$954,000. Other creditors listed include SCI Ecommerce, Shenzhen Lanmey Industries, and Intrepid E-commerce Services.
KCP’s lawyers stated that the liquidator should be immediately authorised to investigate Qoo10’s activities, given the strong indications of misconduct by the company’s management that led to these financial problems.
Between April and August, the Monetary Authority of Singapore (MAS) as well as other government bodies received numerous complaints from Qoo10 merchants regarding payment delays. In September, Qoo10 informed MAS that a large number of merchants would face payment delays, resulting in MAS suspending all payment services provided by Qoo10 in Singapore.
However, MAS emphasised that this suspension does not prohibit Qoo10 from operating its e-commerce platform. Even so, there were no alternative payment methods available on the platform, so consumers were unable to make transactions.
This case shows the huge impact of poor financial management in an e-commerce company, causing losses to many parties, including merchants, business partners, and customers.
